Econet takes regulator to court over tariff

Published on 14 January 2016

By Tawanda Karombo

A storm over mobile voice tariffs is raging in Zimbabwe after the telecom regulator approved a 1 cent increase for mobile operators. The move has prompted Econet Wireless to take the regulator to court and demand $137.5 million in lost profit.

Zimbabwean mobile operators Telecel, Econet and NetOne are now charging 16 cents per minute for voice calls, after they were allowed to increase the tariff from 15 cents they were charging last year. The Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) last year reduced mobile tariffs by 30%.

But this has not gone down well with the mobile operators who had sought approval from the government for a tariff increase above the 1 cent raise approved for this year. Executives in the industry said on Wednesday that "revenues are fast declining because of the difficult economic environment and the regulator should have factored this".

Econet Wireless, the country's largest telco with about 9 million subscribers, is arguing that the regulator had forced it to pay $137.5 million in licence renewal fees, but then ordered it to reduce tariffs.

READ MORE

The company has accused Potraz of favouritism in its regulatory oversight role within the country's telecoms industry. In its summons to the High Court of Zimbabwe earlier this month Econet alleges that Potraz failed to apply the same directive regarding licence renewal fees to Telecel and NetOne.

Payment of licence renewal fees was among the fallout points between VimpelCom – which previously owned Telecel Zimbabwe – and the government. After moving in to cancel Telecel Zimbabwe's licence, the government then bought out VimpelCom's shares in the Zimbabwean telecom operator.

"The reduction in tariffs was discriminatory in its effect in that it applied the same to plaintiff as it did to 2nd, 3rd and 4th defendants, yet plaintiff had paid the license renewal fees of $137, 5 million in full while 2nd, 3rd and 4th defendants had not," reads a part of the summons filed by Econet.

"As a result of defendant's breach of the license renewal agreement, and, or the terms and conditions of plaintiff's license, plaintiff has suffered damages from loss of profit amounting to $132 670 807 which defendant is liable to pay," it adds.

Anesu Charamba, ICT team leader at Frost & Sullivan Africa said in a recent interview that the Zimbabwe government was now "better positioned to compete with Econet by leveraging Telecel's existing infrastructure which could create benefits for consumers in the country over the long term", after buying out VimpelCom.